Business interruption coverage typically covers physical damage and may apply to shutdowns, revenue losses and to pay fixed costs like salaries and health care for employees who can’t work in a natural disaster, said Jim Whittle, chief claims counsel for the American Insurance Association.
Though there often isn’t a deductible on pay, there may be a waiting period of up to 72 hours before coverage would kick in after disaster occurs, potentially leaving employees in a lurch if their employers won’t or can’t pay wages until the coverage takes effect.
Home-based workers need to buy commercial coverage to get business interruption benefits, as homeowner policies generally do not cover business-related damages.
Because commercial policies are often individually tailored to the company, the insurance association did not have data on what percentage of firms has elected it as part of their disaster preparedness plan, Whittle said. Flood insurance would need to be purchased separately.
If you’re covered, “start the claim process as quickly as you can,” Whittle said. “Insurers want to settle their claims as soon as possible, too.”
“Keep careful records to substantiate your claim,” Childs said.
In a presidentially declared disaster, Disaster Unemployment Assistance is also available to individuals whose work has been lost or interrupted.